Purpose

This bill creates a new framework in Minnesota to recognize gold and silver in certain forms as legal tender, establish a state-regulated bullion depository system, and enable an electronic payment system based on gold and silver specie. It aims to allow private use of gold and silver specie for payments, provide storage and transaction services through a bullion depository, set rules for how transfers work, ensure security and privacy, and prohibit certain forms of centralized digital control (like a central bank digital currency or social credit systems).

Key definitions and terminology

• Account holder: a person who has a single or joint account in a bullion depository.
• Allocated: bullion that is specifically identified and set aside for a particular account holder.
• Bullion depository: a facility established to store gold and silver bullion and provide related services.
• Depository agent: a private entity authorized to operate a bullion depository or provide related services.
• Electronic payment system: a platform or system (digital) used to move funds or values between parties under the bill.
• Gold bullion: refined gold valued mainly by metal content, including gold coin.
• Gold coin: gold metal in bars or other forms certified to at least 99.5% purity, stamped with weight and purity.
• Gold specie: gold bullion with intrinsic monetary value used or intended as money.
• Legal tender: a recognized medium to pay debts, taxes, fees, and other obligations.
• Silver bullion: refined silver valued mainly by metal content, including silver coin.
• Silver coin: silver metal certified at least 99.9% purity, stamped with weight and purity.
• Silver specie: silver bullion with intrinsic monetary value used or intended as money.
• Social credit scoring system: a system that records or ranks behavior or compliance and may condition access to services based on those judgments.
• Section 45.20: the part of Minnesota law this bill would modify/expand.

Main provisions and how they work

• Recognition of gold and silver as legal tender
  • Gold specie and silver specie are recognized as legal tender in Minnesota.
  • They may be used to pay debts between private parties if both parties agree.
  • They may be used to pay taxes, fees, or other obligations to Minnesota or its authorities if those authorities accept them.
  • A person is not required to accept gold or silver specie as payment, and transfers can be done by owner’s electronic or written instructions.
• Establishment and operation of bullion depositories
  • The Commissioner of Commerce must authorize at least one bullion depository in Minnesota.
  • Each depository must provide vault facilities, follow best-practice guidelines (LBMA or equivalent), and offer accounts to hold gold and silver bullion where account holders can buy, sell, save, or spend.
  • The Commissioner may contract with a depository agent and may contract with private entities to develop or operate an electronic payment system.
  • Electronic or written transfers of gold or silver specie must be fully backed by specie held in a qualified depository and redeemable on demand by the account holder.
• Rulemaking and standards
  • The Commissioner must adopt rules to designate/establish bullion depositories, authorize payment systems, and implement the section.
  • Rules must ensure depositories are secure, transparent to account holders, and accessible; payment systems comply with state and federal laws; depository agents act in Minnesota’s and account holders’ best interests; regular verification of bullion and compliance; and that systems and vendors are licensed as appropriate.
  • Privacy requirements must protect account holder information and prevent use for a social credit system; information should not be shared without proper authorization except as needed to enforce the section.
• Electronic payment system requirements
  • The Commissioner must authorize at least one electronic payment system that lets participating vendors receive and process payments using gold or silver specie held in the depository.
  • The depository must have contracts with each authorized payment system to provide services for deposits of bullion.
• Insurance and deposits
  • Each deposit in a designated or established bullion depository must be insured with an all-risk policy by a private insurer for 100% of the full replacement value.
  • Deposits in the depository are the sole property of the account holder and cannot be taken by the state or federal government without due process.
• Reporting
  • By January 15 each year, the Commissioner must submit a report on: the status and operations of the depository, usage of authorized payment systems, and the economic impact of recognizing gold and silver specie as legal tender.
• Prohibitions and tax considerations
  • The bill does not create or enable a central bank digital currency, social credit scoring, or other forms of social/economic control.
  • Exchanging one form of legal tender for another does not create tax liability; exchanging or purchasing specie itself does not trigger tax liability.

How this would change existing law

• Adds a new framework under Minnesota Statutes to recognize gold and silver specie as legal tender and to allow private payments using specie, subject to mutual agreement.
• Creates a regulated bullion depository system with defined roles (commissioner, depository, depository agent) and an approved electronic payment system.
• Introduces specific rulemaking and privacy protections around bullion depository operations and electronic payments.
• Establishes insurance, reporting, and tax-related clarifications related to specie transactions.
• Explicitly prohibits the creation of a central bank digital currency and social credit mechanisms within this framework.

Oversight, privacy, and compliance

• The Commissioner of Commerce would oversee designation of depositories and approval of electronic payment systems.
• Rules would require privacy protections for account holders and ban using transaction data for social credit scoring, except as necessary to enforce the law.
• All participating vendors and money transmission activities would be subject to state and federal regulations, including money transmitter laws.

Practical considerations and implications

• If enacted, individuals and businesses could hold, transfer, and spend gold or silver specie through authorized depositories and payment systems.
• Financial and privacy implications would depend on how rules are implemented, how many depositories and payment systems are authorized, and how the system integrates with existing financial institutions.
• The bill aims to provide a secure storage and settlement mechanism for specie while avoiding centralized digital surveillance or control mechanisms.

Relevant Terms - gold specie - silver specie - legal tender - bullion depository - depository agent - account holder - allocated bullion - gold bullion - silver bullion - gold coin - silver coin - electronic payment system - London Bullion Market Association (LBMA) guidelines - social credit scoring system - privacy protections - central bank digital currency (CBDC) - money transmitter laws - taxes (tax liability related to specie transactions) - all-risk insurance - deposits - redeemable on demand - qualified depository - electronic transfers - compliance and rulemaking - annual report